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Could a boosted Child Tax Credit return? President Biden wants it to. Read on to learn more. [[{“value”:”
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In 2021, the U.S. was deep in the throes of an economic crisis. Unemployment was high, and businesses were struggling. Consumers needed loads of financial relief.
As such, lawmakers, under President Biden’s leadership, passed a massive stimulus bill that included a boost to the Child Tax Credit. And while that boost has since gone away, President Biden has made it clear that he hasn’t forgotten about it.
A financial lifeline for parents
The Child Tax Credit underwent a number of key changes in 2021. First, its maximum value was raised from $2,000 to $3,000 for children aged 6 to 17 and $3,600 for children under age 6. The credit also became fully refundable, so parents could receive its full value even if they owed no tax to the IRS. Finally, the credit was paid in installments so eligible recipients did not have to wait until they filed their taxes to get their money.
Unfortunately, those enhanced features only applied to 2021. In 2022, the Child Tax Credit reverted back to its former state. But President Biden has made it clear that he’s looking to see that boost restored.
During his recent State of the Union address, Biden said, “The Child Tax Credit I passed during the pandemic cut taxes for millions of working families and cut child poverty in half. Restore that Child Tax Credit. No child should go hungry in this country.”
The tax credit is still available
Some lawmakers have been pushing for a boosted Child Tax Credit since 2022. And while that hasn’t happened yet, you should know that the credit still exists, and you may be eligible for it on your 2023 tax return.
To qualify for the Child Tax Credit for 2023, you need to have one or more children in your house under the age of 17. From there, the credit is worth up to $2,000 per child, but that sum begins to phase out if you’re single earning $200,000 or more, or if you’re married earning $400,000 or more jointly with your spouse.
For each $1,000 of income above the threshold that applies to you, your credit is reduced by $50. So if you’re single earning $201,000, you’d get a $1,950 credit.
You should also know that the Child Tax Credit is not fully refundable for 2023. However, it’s partially refundable for up to $1,600.
There’s also legislation in the works that could increase refundability for the Child Tax Credit for 2023, but so far, it hasn’t passed. At this point, it’s questionable as to whether lawmakers will come to a decision ahead of the April 15 tax-filing deadline.
It’s a good thing to see that President Biden has a boosted Child Tax Credit on his radar. But remember, even if the credit doesn’t get enhanced, it still offers a lot of value in its current state. So it definitely pays to see if you qualify for it for the 2023 tax year.
Plus, as a parent, you may be entitled to other tax credits that offer you some financial relief. These could include the Earned Income Tax Credit and the Child and Dependent Care Credit, which lets you claim a portion of your child care costs.
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